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Health Care Reform Memo: December 24, 2012

Deloitte Center for Health Solutions publication

The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.

My take: the U.S. health care system and the ACA

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

In Charles Dickens’ A Christmas Carol, Ebenezer Scrooge is faced with his worst nightmare—the ghost of his Christmas’ past. He sees himself—cold-hearted, tight-fisted, uncaring, insensitive, and the tale of his redemptive journey frames the rest of the classic tale.

In health care, we have our ghosts of times past.

We have resisted the public’s demand for transparency, arguing that what we do is too complicated for “mere mortals” to understand.

We have rationalized that everything we do is necessary care and wide variation acceptable, while resisting efforts to standardize diagnosis and treatments where the evidence is strong.

We have created mountains of data, but sparse information.

We have institutionalized tensions between plans and hospitals, between primary care and specialty medicine, and between regulators and innovators. We decry the shortcomings of the “other” sector and revel in our own prowess.

We have embraced information technologies that help us get paid, and resisted technologies that help us diagnose more accurately and treat more appropriately.

We have created a labyrinth of regulations at the state and federal levels that defy understanding, much less compliance.

We expect the latest and best technologies, treatments, and facilities but we don’t want to pay for them.

And we have maintained structural imbalances between a sick care system and population health, between services for those with coverage and those without, and between health services and human services when the two are inseparable.

The events of Newtown forced each of us to pause as a nation, if only for a little while. In that community and others, there are empty chairs and broken hearts in this holiday season.

In health care, it’s time to pause. Reflect. And fix a system that’s broken, not a result of Scrooge-like people we choose to vilify, but due to fundamental flaws in a system we’ve all come to accept.

Dickens’ tale of Scrooge’s journey through his wretched past ends not in “Bah, humbug,” but in Tiny Tim’s surmise “God bless us, every one!” May our system’s journey to the future also be so—our ghosts need not be our undoing, they’re simply an important part of our journey.

Best wishes in this holiday season!

Paul Keckely

Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions

Implementation update

ACA implementation calendar: 2013

Assuming no major changes in the fiscal cliff negotiation, the major Affordable Care Act (ACA) provisions that kick in in 2013 include…

ACA implementation calendar: 2013

Contraceptive coverage rule legal challenges: update

Korte & Luitjohan Contractors was denied a preliminary injunction against the ACA provision that certain employers must provide contraceptive services as part of their health coverage. To date, almost 50 cases have been filed in district courts by employers and educational institutions, and as of November 2012, two preliminary injunctions have been denied and three granted. The Illinois District Court judge denied the injunction on the grounds that the construction company’s argument lacked merit. Hobby Lobby’s appeal to the 10th Circuit District Court was denied last week; the arts and crafts retailer has appealed the decision to the Supreme Court.

PCORI releases funds for CER research

On Tuesday, the Patient-Centered Outcomes Research Institute (PCORI) awarded $40.7 million to 25 organizations for clinical effectiveness research (CER) projects. These are the first funding awards to research organizations since PCORI began operation in the fall of 2011.

Background: PCORI was established and appropriated funding through 2019 by Section 6301 of the ACA to conduct CER.

School-based health centers receive $80 million in federal funding

Last week, the U.S. Department of Health and Human Services (HHS) announced a third series of grants to school-based health centers: $80 million will go to 197 school-based health centers to support primary care services for almost 400,000 school-age children. Section 4104 of the ACA allocated $200 million for school-based health centers to support schools with underserved student populations eligible for Medicaid or other social supports. To date, the program has distributed $190 million for preventive services, primary care, mental health care, substance abuse counseling, case management, dental health, and health promotional activities.

Patient advocacy groups encourage broader drug coverage in EHBs

Over 150 patient advocacy groups sent a six-page letter to HHS Secretary Kathleen Sebelius Tuesday in response to the proposed rule on essential health benefits (EHBs) issued in late-November. In the letter, the groups recommended that the EHB benchmark plan include a robust formulary for plans that is reviewed for adequacy and quality, requiring plans to cover all or substantially all drugs in each class, and limiting cost-sharing for patients. The groups also requested a clearer definition for how state and federal governments will “assess, monitor, and enforce that law’s non-discrimination measures” to ensure that rigorous methods are used to guarantee individuals with significant health needs are not deterred from enrolling. Comments on the proposed rule are due to HHS by December 26, 2012. Note: in its proposed rule, HHS recommended that coverage for “at least the greater of: 1) one drug in every category and class; or 2) the same number of drugs in each category and class as the EHB benchmark plan.”

ACA premium tax credits challenged; Congressmen believe they can only be accessed through state-based health exchanges

Last week, members of the U.S. House of Representatives Ways and Means and Government Oversight Committees Dave Camp (R-MI), Darrell Issa (R-CA), and Charles Boustany (R-LA) sent Secretary of Treasury Timothy Geithner a letter inquiring about the advanced premium tax credit (APTC) established by Section 1401 of the ACA, that permits individuals to receive a premium tax credit if the cost of purchasing health insurance coverage from a qualified health plan selling coverage on a health insurance exchange (HIX) exceeds a certain percentage of their annual income. According to the Congressmen, the APTC should only apply to individuals who purchase health insurance on a state-based exchange, not a federally-facilitated exchange, and claim Treasury staff have not provided the House Committees with sufficient evidence to substantiate guidance from the Treasury indicating that the APTC applies to all eligible individuals regardless of the type of HIX— federally-facilitated, state-partnership, or state-based. Note: to date, 18 states and the District of Columbia have indicated they will operate their own exchanges, and many of the remaining states may default to a federally-facilitated exchange. Therefore, the challenge above would result in lower federal subsidy spending on individuals making between 133 percent and 400 percent of the federal poverty level (FPL).

Legislative update

Update: fiscal cliff negotiations

As of the morning of December 23, no deal had been reached to avoid the fiscal cliff. The fiscal cliff involves $607 billion* in deficit reduction starting December 31, 2012, which includes a combination of $399 billion in taxes that go up to prior levels. Also, spending cuts mandated in the Budget Control Act of 2011 will go into effect on January 2, 2013, which will amount to an additional $109 billion in cuts in 2013 as part of a $1.2 trillion spending reduction between 2013 and 2022—including some cuts from the ACA. Note: Medicare cuts in the Budget Control Act are $169 billion/ten years in addition to other cuts/changes specified in the ACA.

Fiscal cliff, FY2012-2013 breakdown

* U.S. Congressional Budget Office (CBO) projects a weaker economy will result, creating lower taxable incomes and increased spending in some areas, increasing the deficit by $47 billion; therefore, net projected reduction is $560 billion.

Fiscal cliff, FY2012-2013 breakdown_Index

Projected sequestration savings, in billions (2013-2021)

Source: Bipartisan Policy Center analysis, “The Sequester’s Mechanics and Adverse Effects on National and Economic Security,” June 2012

House GOP introduces Spending Reduction Act of 2012; White House vows veto

Last Wednesday night, the U.S. House of Representatives introduced the “Spending Reduction Act of 2012” that would repeal funding for several ACA provisions, which President Obama has said he would veto. Specific health care cuts would include:

H.R. 6684 section/name1 Legislation Definition
Section 201: Repealing mandatory funding to states to establish the American health benefit exchanges Repeals Section 1311 of ACA
  • As of FY2012, states have received $2.1 billion in HIX planning grants per Section 1311 of the ACA2
Section 202: Repealing Prevention and Public Health Fund (PPHF) Repeals Section 4002 of ACA
  • As originally enacted, Section 4002 of the ACA appropriated the following amounts to the PPHF: $500 million (FY2010); $750 million (FY2011); $1 billion (FY2012); $1.25 billion (FY2013); $1.5 billion (FY2014); and $2 billion (FY2015+)3
Section 203: Rescinding unobligated balances for CO-OP program Section 1322 of ACA
  • Section 1322 of the ACA appropriated $6 billion to the CO-OP program
  • Awards loans for start-up costs and grants to meet solvency requirements, to member-run nonprofits that will offer qualified health plans
Section 212: Rebasing of state disproportionate share hospital (DSH) allotments for FY2022 Amends Section 1923 of the Social Security Act
  • Section 2551 of the ACA lowers the reduction in federal Medicaid DSH payments from $18.1 billion to $14.1 billion and advances the reductions to begin in FY2014; directs the Secretary to develop a methodology for reducing DSH allotments to all states in order to achieve the mandated reductions; extends through FY2013 the federal DSH allotment for a state that has a $0 allotment after FY2011. Guidance from HHS is forthcoming in January 2013
Section 213: Repeal of Medicaid and CHIP maintenance of effort (MOE) requirements under ACA Amends Sections 1902, 2105(d)(3) of the Social Security Act; repeals Section 2001 of ACA
  • Per Section 2001 of the ACA, states would be required to maintain the same income eligibility levels through December 31, 2013 for all adults; MOE requirement would be extended through September 30, 2019 for all children currently covered in Medicaid or CHIP
Section 214: Medicaid payments to territories Amends Section 1905(b) of the Social Security Act to reduce the Federal Medical Assistance Percentages from 55% to 50%
  • Currently, Medicaid funding varies by state and is determined by a formula based on states per capita income; states with a below average per capita income receive higher federal matching
Section 215: Repealing bonus payments for enrollment under Medicaid and CHIP Repeals parts of Section 2015, rescinds funds made available by Section 2015(a)(3) of the Social Security Act
  • The Children’s Health Insurance Program Reauthorization Act of 2009 added Section 2105(a)(3) to the Social Security Act to give bonus payments to states whose child enrollment in Medicaid exceeds the targets specified in the law; CHIPRA bonus payments reached $305 million in FY20124

1. HR.6684, Spending Reduction Act of 2012
2. Kaiser Family Foundation, “Total Health Insurance Exchange Grants as of FY2012,” 2012
3. Congressional Research Service, “Discretionary Funding in the Patient Protection and Affordable Care Act (ACA),” December 16, 2011;
4. Insure Kids Now, “CHIPRA Performance Bonuses: A History (FY2009 – FY2012),”

Social security cuts on table using “chained CPI”

A change in the way annual costs of living are factored into Social Security payments is being considered: the “chained” consumer price index (CPI) would replace the CPI for wage and clerical workers (CPI-W) resulting in .3 percent decreased spending for Social Security and Supplemental Security Disability Income/Supplemental Security Income payments. The CPI-W calculates inflation taking into account the price of goods and services; the chained CPI would take into account spending patterns as well, and would slow the rate payment increases in response to inflation. The CBO projects the chained CPI could save $112 billion in the next ten years. Note: projections are based on the assumption that the chained CPI was implemented at the beginning of 2012.

Background: current projections of the Social Security trust indicate the program faces a shortfall beginning in 2033, after which only 75 percent of scheduled benefits will be paid. Under law, Social Security may only disperse funds from the trust fund, cannot receive financing from the general revenue, and should not contribute to the budget deficit.

Specialists seek permanent fix for SGR as part of deficit reduction, fiscal cliff negotiation

In a letter to congressional leaders last week, the Alliance of Specialty Medicine, a consortium of 13 medical specialties, asked Congress to create a permanent replacement for the sustainable growth rate (SGR) Medicare payment formula by the end of the year.

If Congress does not act, an SGR-driven 26.5 percent pay cut will take effect January 1, 2013, which is in addition to the potential 2 percent Medicare pay cut if Congress does not act to stop across-the-board cuts called for in the Budget Control Act of 2011.

The groups say their members are not making investments in electronic health records (EHRs) or other improvements to their practice infrastructure and reconsidering their Medicare participation or limiting the number of Medicare patients.

The cost for a one-year delay in the SGR is $25.2 billion, according to an estimate from the CBO.

FDA seeks to coordinate oversight of compounding pharmacies with states

Last week, the U.S. Food and Drug Administration (FDA) held a meeting with states to clarify the role of the state vs. the role of the federal government in compounding pharmacy regulation and oversight in response to the recent meningitis outbreak associated with the New England Compounding Center (NECC). Several priority areas were identified, such as increasing training for state regulators, enhancing communication between the states and the federal government, and legislation that would require all compounding pharmacies to register with the FDA and undergo systematic inspections.

Defense bill expands abortion coverage for military women

Last week, the final defense authorization bill included a provision sponsored by Senator Jeanne Shaheen (D-NH) to allow the military to pay for abortion services for military women in cases of rape or incest. Currently, the military will pay for abortion when the mother’s life is in danger.

GAO report: CMS and CMS Innovation Center services overlap

Per the Government Accountability Office (GAO) review, the programs supported by Centers for Medicare & Medicaid Services (CMS) and the CMS Innovation Center have “similar goals, engage in similar activities or strategies to achieve these goals, and target similar populations.” The GAO acknowledges that coordination with CMS is necessary and directed CMS to identify and address areas of overlap to ensure efficient use of federal resources moving forward.

Background: Section 3021 of the ACA established the CMS Innovation Center to test innovative payment and service delivery models to reduce costs and improve quality of care. Currently the Innovation Center is testing 17 new models of payment delivery.

State update

Twenty-three states receive CHIPRA bonuses

Last week, CMS announced 23 states would receive the Children Health Insurance Program Reauthorization Act (CHIPRA) bonuses for meeting enrollment and renewal targets for Medicaid- and CHIP-eligible children. Colorado’s $43 million represented the largest share of the combined $306 million to be disbursed.

Medicaid 24 percent of average state budget; ten states in the red

Tuesday, the National Conference of State Legislatures (NCSL) reported that ten states are currently in the red on spending for public health programs, including Medicaid which consumed 24 percent of all state expenditures in FY2012. The Texas Medicaid program faces a $4.3 billion deficit for 2012 and 2013, and West Virginia, Iowa, Nevada, California, Maryland, Virginia, Connecticut, Georgia, and Maine also face spending shortfalls. Maine officials were surprised to find their Medicaid costs continuing to rise despite declining caseloads.

State round-up

  • Colorado Governor John Hickenlooper (D) is asking state lawmakers for $18.5 million to expand mental health services in response to the mass shooting in Aurora, Colorado earlier this year and includes a request for the opening of five urgent care mental health centers.

Health exchange update

Late last week, HHS approved Delaware as the first state to operate a state-partnership exchange and Minnesota and Rhode Island have received conditional approval to operate state-based exchanges. To-date, ten states (CO, CT, KY, MA, MD, MN, NY, OR, RI, WA) and the District of Columbia have received conditional approval of their blueprints for state-based exchanges.

Per the summary below, 18 states and the District of Columbia will operate a state-based exchange. According to the Kaiser Family Foundation, seven states are planning for a state-partnership exchange and the remaining states will default to a federally-facilitated exchange.

State-based exchange State-partnership exchange Federal-facilitated exchange

Note: updated as of December 14, 2012

Sources: Kaiser Family Foundation, National Association of State Health Policy: State Reform, and POLITICO Pro

Medicaid update

As of December 21, 12 states reported they will not expand their program; 14 states and the District of Columbia will expand, and 24 states are undecided/undeclared.

Participating Not participating or highly likely not to participate Undecided or undeclared

Note: states do not have a deadline to make a decision on Medicaid expansion and may opt in or out of participation at any time. This chart was compiled using publically available information and is subject to change.

Other recent announcements:

  • Monday, Virginia Governor Bob McDonnell (R) announced that his budget for the FY2012-2014 would not provide funds for expanding Medicaid under the terms of the ACA. The budget does include an additional $114.6 million to cover the costs associated with increased program usage and inflation but the projected increases in revenue from pharmacy rebates “will more than offset” the difference. The Governor also cites his decision not to expand Medicaid due to the fact that he believes there is need for Medicaid reform at the federal level.

Industry news

Hospital systems starting their own insurance plans

A prominent Wall Street Journal article last Tuesday noted that prominent provider organizations including Piedmont Healthcare and WellStar Health System in Atlanta, North Shore Long Island Jewish Health System, and others plan to operate their own insurance products for Medicare enrollees and other employers.

(Source: The Wall Street Journal, “Hospital Systems Branch Out as Insurers,” December 16, 2012)

My take: this is back to the future: in the 90s, health insurance companies and health systems squared off in a vigorous effort to control the premium stream. The operational and administrative core competencies in the acute and insurance sectors are quite dissimilar. Managing risk-based contracts is vital to a health system’s future: for most, the decision will be whether to partner with a commercial health plan to access the core competencies, infrastructure, and operational requirements for population-based health management, or go it alone. It’s a make vs. buy decision most health systems are now considering.

Study: repeat testing common among Medicare beneficiaries

Among Medicare beneficiaries undergoing echocardiography, 55 percent had a second test within three years. Additionally, repeat testing for other types of exams was common, as 44 percent of imaging stress, 49 percent of pulmonary function, and 46 percent of chest computed tomography tests were repeated within three years.

(Source: Welch, Hayes, and Frost, Archives of Internal Medicine, “Repeat Testing Among Medicare Beneficiaries,” December 2012)

Study: length of stay drop in VA hospitals

In hospitals, the average length of stay decreased 1.46 days from 5.44 to 3.98 days over a 14-year period and the risk-adjusted 30-day readmission rates for all of the diseases, as well as individual, specific diseases decreased. Note: researchers’ findings are from a 14-year observational study utilizing admissions data from 129 Veterans Affairs (VA) hospitals in the U.S.

(Source: Kaboli, et al, Annals of Internal Medicine, “Associations Between Reduced Hospital Length of Stay and 30-Day Readmission Rate and Mortality: 14-Year Experience in 129 Veterans Affairs Hospitals,” December 2012)

Study: ‘never events’ frequent

Nearly 80,000 “never events”—occurrences that medical professionals universally agree should never happen during surgery—occurred in U.S. hospitals between 1990 and 2010. Researchers estimate that foreign objects such as sponges or towels are left behind in patients 39 times per week; 20 times per week the wrong procedure is performed on a patient; and 20 times per week the wrong body site is operated on. The study utilized the National Practitioner Data Bank (NPDB) to identify malpractice and out-of-court settlements that related to these types of errors. Through the NPDB, the researchers identified more than 9,000 malpractice judgments and claims over 20 years with payments up to $1.3 billion. According to the study, 6.6 percent of the patients died; 32.9 percent and 59.2 percent of patients suffered permanent or temporary injuries, respectively.

(Source: Mehtsun, Ibrahim, Diener-West, Pronovost, and Makary, Surgery, “Surgical never events in the United States,” December 2012)

Study: obesity, stress, and exercise top employer concerns

A survey of HR executives by the Society for Human Resource Management (SHRM) and the Alliance for a Healthier Minnesota found 49 percent of respondents say containing health insurance costs is their primary health-related concern, followed by decreased productivity (35 percent), absenteeism, (30 percent) and workers’ compensation costs (27 percent). Top employee health concerns were obesity (24 percent), stress (23 percent), and lack of exercise (15 percent).

Study: employer premiums increases passed through to employees

The Commonwealth Fund released a report earlier this month with analysis of each state’s private employer premium data using the Medical Expenditure Panel Survey (MEPS) concluding average employer premiums increased 62 percent from 2003 to 2011 and will increase to $25,000 by 2020. The cost of employee health insurance grew faster than income in every state. Fast-growing premiums outpaced wages, the report said, and have “been consuming resources that employers might otherwise have earmarked for salary or wage increases, for other benefits or for hiring additional workers.” A worker, on average, spent $3,962 on family premiums in 2011, an increase of 74 percent from 2003. Meanwhile, the average family premium totaled $15,022, an increase of 62 percent from 2003, the report said.


“While last week was one milestone, we are not taking an 'all or nothing' approach to exchanges. Many states are making impressive progress and we are committed to working with all states as we approach open enrollment in October 2013.”

—HHS Secretary Kathleen Sebelius’ Blog December 17, 2012, reminding states that the deadline for participation in the federal partnership exchange model is February 15, 2012

“On several occasions, Congress failed to act in time to prevent the implementation of cuts, including twice in 2010 when Congress enacted five separate bills to stop the cuts. The resulting interruptions in payments disrupted access to care for Medicare beneficiaries and strained physician practices. As this pattern continues, physicians are growing increasingly wary of participating in a program that mandates significant practice investments (electronic prescribing, electronic health records, quality reporting, ICD-10 implementation) while failing to provide any certainty of future payments. The fact that Congress continues to fail to meet this most basic obligation is inexcusable.”

—Letter from the American Medical Association to Senators Harry Reid (D-NV) and Mitch McConnell (R-KY) asking for permanent replacement of the SGR

“We do not suggest health care will be less innovative over coming next decade, but rather the focus of innovation will shift from the product arena to health care delivery. A demand surge in an environment of fiscal constraint and slower product innovation will create a climate that favors investment in new ways of delivering care, in part by applying power of information technology—long overdue in health care, relative to other sectors. Indeed the shift in emphasis from managing inputs, like the rate of adoption of new products and the number of physician visits, toward delivering outputs, like patient satisfaction, clinical outcomes, and overall system savings, is already well underway.”

—Eliades et al, Bain & Company, “Healthcare 2020”

Fact file

  • Bundled payments: the 17 most expensive episodes of care in Medicare accounted for 60 percent of total spending: subsequent readmissions accounted for 23 percent and physician services 10 percent—if patients were managed at 25th percentile comparing 306 hospital referring regions, savings would be $35 billion annually; if at 50th percentile, savings of $18.2 billion annually. (Source: Cutler et al, New England Journal of Medicine [NEJM], “The potential for cost savings through bundled payments,” March 22, 2012)
  • Retail clinic visits: increased 300 percent from 2007 to 2009 to 5.97 million at average cost of $110—$657 million in retail clinic care in 2009. There 1,400 clinics nationwide; still a small part of ambulatory market: 577 million physician office visits, 117 million emergency room (ER) visits. (Source: Modern Healthcare, “More health care in store,” November 17, 2012)
  • Observation stays: hospital observation stays for Medicare enrollees increased 34 percent from 2007 to 2009 vs. 6 percent decrease in hospital admissions; hospitals using Condition Code 44. (Source: CMS)
  • U.S. population: projected to grow slowly, continue aging, and become more diverse: from 314 million in 2012 to 420 million in 2060; U.S. births: 4,120,000 in 2012 vs. 4,930,000 in 2060. U.S. deaths: 2,522,000 in 2012 vs. 4,039,000 in 2060. (Source: U.S. Census Bureau)
  • U.S. gun violence: in 2010 there were 8,775 gun-related homicides nationwide. Firearms were used in 67.5 percent of all murders, 41.4 percent of robberies, and 20.6 percent of aggravated assaults. (Source: FBI)
  • Deficit reduction: in order to reduce the deficit, 64 percent oppose increasing the Medicare eligibility age and 75 percent strongly support cutting overall government spending. (Source: Politico/GWU Poll)
  • Demography: American life expectancy has risen to 78.5 years and deaths from cardiovascular disease and cancer have fallen by 34.6 percent and 7.6 percent, respectively, since 1990; 30.8 percent of U.S. adults have high blood pressure, 27.8 percent are obese, and 9.5 percent have diabetes. Vermont was reported to be the healthiest state for the 6th consecutive year. (Source: United Health Foundation)
  • Mini-strokes: as many as 30 percent of the estimated 800,000 strokes per year in the U.S. are preceded by a transient ischemic attack (TIA), or “mini-stroke.” Individuals who suffer a TIA face roughly a 17 percent chance of having a stroke within 90 days. (Source: The Wall Street Journal)
  • ER crowding: a study of 995,379 admissions resulting from ER visits at 187 hospitals found that patients admitted on days with “high ER crowding” were 5 percent more likely to suffer an inpatient death. (Source: Annals of Emergency Medicine)
  • Global health: excess body weight was attributable to over 3 million deaths globally in 2010, three times as many as malnutrition. Stroke and heart disease claimed 12.9 million lives, cancer 8 million, HIV/AIDS 1.5 million, and tuberculosis 1.2 million. (Source: Institute for Health Metrics and Evaluation)
  • C-section births: individuals born through Cesarean (C)-section are 33 percent more likely to be overweight or obese compared to those delivered vaginally. Roughly one in four babies born in the U.S. is now delivered by C-section. (Source: International Journal of Obesity)
  • Meaningful use incentives: Maine (42 percent), Delaware (34 percent), and Massachusetts (33 percent) are the states with the highest percentage of eligible physicians and hospitals being paid meaningful use incentives by CMS. (Source: ONC)
  • Obesity among Medicare beneficiaries: between 1988 and 1994, 24 percent of men and 27 percent of women ages 65 to 74 were obese; between 2009 and 2010, 43 percent men and 45 percent of women ages 65 to 74 were obese. (Source: American Hospital Association, “Are Medicare Patients Getting Sicker?” December 2012)
  • Diabetes in adults over age 65: between 2002 and 2010 the rate of diabetes in this group has risen by 9 percent—from 18 percent in 2002 to 27 percent in 2010. (Source: American Hospital Association, “Are Medicare Patients Getting Sicker?” December 2012)
  • Average health care spending per person by age: 5 to 17: $1,695; 18 to 24: $1,834; 25 to 44: $2,739; 45 to 64: $5,511; 65 and older: $9,744. (Source: American Hospital Association, “Are Medicare Patients Getting Sicker?” December 2012)
  • Secondhand smoke: 29 million non-smokers that live in multi-unit housing face exposure to secondhand smoke. (Source: CDC)
  • Quality of living: Vienna, Zurich, and Auckland topped the worldwide city rankings for quality of life: highest ranked American city—Honolulu (# 28) followed by San Francisco and Boston. (Source: Mercer)
  • FDA drug approvals: the U.S. FDA approved 34 new drugs in 2012 to-date—highest in eight years. European regulators expect to receive 54 new drug applications in 2013, continuing the upward trend seen since receiving 34 in 2010. (Source: Reuters)
  • Supply chain costs: Medicare pays an average of $919 each for back braces that typically cost suppliers $191. More than 121,000 of the braces were paid for by Medicare in 2011, jumping from less than 49,000 in 2008. (Source: HHS)
  • Employed surgeons: the number of surgeons in a “full-time hospital employment arrangement” increased by 32 percent from 2006 to 2011. Between 2001 and 2009 the number of surgeons who identified as operating a self-employed practice dropped from 48 percent to 33 percent. (Source: Archives of Surgery)
  • Teen smoking: the number of U.S. teens who reported smoking within the past 30 days reached a recorded low this year, falling to 10.6 percent from 11.7 percent in 2011. (Source: National Institute on Drug Abuse/University of Michigan)
National health reform: What now?

National health reform: What now?

At Deloitte, we continue to explore and debate the key questions facing 
the industry, and we look forward to helping our clients find and implement 
the right answers for their organizations. To learn more, visit today.

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